Economic jitters bring global house price growth down
Lingering concerns over the Eurozone economy, jitters in global stock markets and discussions of when, not if, a US rate rise occurs is impinging on growth, says the report from international real estate firm Knight Frank.
Annual growth of 0.1per cent is the index’s weakest rate of growth since the final quarter of 2011 and of the 56 housing markets tracked some 27per cent recorded an annual decline in prices.
Despite stringent cooling measures, Hong Kong saw house price growth of 20.7 per cent but in China growth was down 5.7per cent. Increasing liquidity and the flow of wealthy mainland Chinese investors into Hong Kong’s residential sector meant the number of new homes sold in the first half of 2015 exceeded 8,700.
“The recent volatility in the Chinese stock market has underlined the fragility of the Eurozone’s recovery and has pushed the likelihood of a rate rise by the US Federal Reserve further back, which is good news for home owners in the US and beyond but bad news for corporate balance sheets,” said Kate Everett-Allen, head of international residential research at Knight Frank.
The report points out how housing markets in China and the US, two countries which together account for around 33per cent of global GDP, are following divergent paths. Since the start of 2014 mainstream prices in China have fallen on average by 6.2 per cent while the average price of a residential
property in the US is up 7.6 per cent over the same period.
In Dubai, mainstream residential prices fell by 2.8 per cent quarter on quarter and declined by 12.2per cent in the year to June. ‘Weaker demand, a strong US dollar and ongoing cooling measures have dampened sales volumes in the mainstream sector,’ said Everett-Allen.
She also pointed out in Propertywire that Europe is no longer the weakest performing world region, a title it has held for 15 consecutive quarters. On average prices across Europe increased by 2.8 per cent year on year with Turkey, Estonia, Luxembourg and Ireland all achieving double digit annual price growth.